Top 5 Financial Planning Concerns for Retirees-(1) Longevity Risk
Many of you may remember David Letterman’s regular “Top 10 List” feature on late night television. I looked at the top concerns of retirees for both financial and non-financial issues and thought I would put together my own list. Unlike Letterman’s list, however, my Top 5 list for each category is not in any particular order of importance.
(1) Longevity Risk. One financial concern for many retirees is the fear of running out of money before they run out of life. This is the definition of “longevity risk,” and it can drive some retirees to be reluctant to spend money enjoying their retirement years because they do not want to take on this risk.
Since Americans are living longer, and there are inflation and purchasing power risks over time, it can be a very real risk for many people if their retirement years last decades. But oftentimes the actual risk of running out of money is significantly lower than the perceived risk of doing so. And that is where seeking professional guidance can make a tremendous difference for retirees.
An experienced, retirement-focused, financial advisor can help you evaluate your personal financial situation, assess your cash flow needs over your retirement years, provide guidance on changes needed in investing or lifestyle planning, and, perhaps most importantly, provide peace of mind to many of you that will allow you to better enjoy your retirement years.
One of the most rewarding outcomes of my retirement analysis work for clients is when I can tell them that they will be okay based on all of the information I have to work with (which does not include the use of my Magic 8-Ball that I keep on my desk), and can give them permission to spend more on themselves and their families now, instead of having too much left over at the end of their lives.
And, yes, in some cases I do have to temper a client’s enthusiasm for spending by providing some perspective on what their retirement income and savings will permit over time. But that can also bring peace of mind knowing rather than simply guessing. Fortunately, even in these cases I have never had to advise clients that they will be in the same situation as the late comedian Henny Youngman, who was known to say, “I've got all the money I'll ever need, if I die by four o'clock.”
Learn more about what a specialized retirement-focused, fiduciary, fee-only financial advisor can do for you by visiting our website at www.SafeHarbor.financial where you will find information about our cash flow approach to retirement planning, the value of using a Retirement Success Advocate, and a list of our standard projects and fees. Or you can call Safe Harbor at 302-313-6644 or email us at info@safeharborfinancialadvisors.com for an initial no-cost, no-obligation assessment meeting.
Stay tuned for the rest of the Top 5 Financial Planning Concerns for Retirees in future posts, as well as the Top 5 Non-Financial Planning Concerns for Retirees.
